What Is Obamacare? 8 Facts You Should Know
Money Girl covers 8 facts about Obamacare and how it will affect your health and your taxes.
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If you follow the news, you’ve heard the term “Obamacare” a lot lately. No matter if you’re uninsured right now or have health coverage through an employer, everyone should get to know what health care reform really means.
In this episode I’ll cover 8 facts about Obamacare so you understand how it will affect your health and your taxes.
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What Is Obamacare?
Obamacare is a nickname given to a bill that passed in 2010 and was signed into law by President Barack Obama (hence the nickname). It's actually called the Patient Protection and Affordable Care Act and it’s a whopping 2,572 pages long. What many people don’t realize is that the law covers a lot more than just health care issues.
Here are 8 facts about what’s really in the law and how it will affect your health and personal finances:
Fact #1: You’re Legally Required to Have Health Insurance
One of the most controversial parts of the Affordable Care Act is called the individual mandate. Starting in 2014, the federal government will require most Americans to buy health insurance.
You must provide documentation, such as a receipt or Form W-2, with your tax return to prove that you're enrolled in a health plan. Otherwise you’ll have to pay a tax penalty of $95 or 1% of your gross income, up to $285, whichever is higher.
But this penalty gets steeper in 2015 and 2016, going as high as $695 or 2.5% of gross income, to a maximum of $2,085.
Fact #2: You Must Have a Qualified Health Plan
When the government says you must have health insurance starting January 1, 2014, they don’t mean just any health insurance. In order to avoid the tax penalty, you must have a certain type, which is called a “qualified plan.”
No matter if you get insurance through work or on your own, a qualified plan must cover these 10 essential benefits:
- Outpatient care
- Emergency services
- Laboratory services
- Preventive care
- Prescription drugs
- Maternity and newborn care
- Pediatric care
- Rehabilitative services
- Mental health and substance abuse treatment
Fact #3: Unhealthy Consumers Can Get Insurance
Starting in 2014, it will be unlawful for an insurance company to deny coverage or raise health insurance rates based on your health. If you have any pre-existing conditions, such as diabetes, cancer, or hypertension, you’ll be able to get health insurance.